Divorce is a distressing process whether spouses rented an apartment and lived paycheck to paycheck or whether they’re wealthy and have decades of combined assets, but for spouses with many assets, untangling the financial aspects of the divorce can add a new layer of distress as well as lengthier negotiations and a far more complex settlement agreement or court resolution. A high-asset divorce is more likely to become a contested divorce and will take much longer to resolve than a divorce for spouses with an average portfolio of assets obtained during the marriage. Though a high-asset divorce may take substantially longer to complete compared to an average divorce, it pays to be patient, since rushing could cause you to lose important assets that you could have retained.
While trying to rush the process is a common mistake, it’s helpful to understand other potential pitfalls and know what to avoid in a high-asset divorce in Colorado.
Avoid Hiding, Selling, or Disposing of Assets in A Divorce
While it may be tempting to squirrel away your favorite pieces of art or transfer an account overseas, it’s crucial to avoid any attempts to hide, sell, or dispose of marital assets before the court orders you to divulge them during the discovery period. Any attempt to hide assets is considered contempt of court and the judge may respond by making you pay your spouse’s legal fees or order higher alimony payments. In some serious attempts to hide or liquidate assets before a divorce agreement, a judge may file criminal charges for financial fraud.
Not Undergoing Mediation to Make Your Own Settlement
Only you and your spouse know what assets have sentimental or emotional value to each other as well as monetary value. No impartial judge could ever divide marital assets in a way that’s as mutually agreeable as the spouses could themselves. It’s a dreadful mistake to avoid mediation and an attempt to create your own fair settlement agreement and instead rely solely on a judge to decide who gets your great-grandmother’s china.
In mediation, you and your spouse have a safe space to negotiate terms. For instance, you could trade a rental property for the beach condo you want to keep or a car your spouse wants for the home furnishings you want to keep. You could also choose to buy out the other’s half in assets you desire or sell and divide the profits for assets neither party wishes to keep.
Mediation can also help you to fairly negotiate shared parenting time or child visitation arrangements, as well as spousal support.
A settlement agreement you and your spouse create on your own is far more likely to be mutually satisfactory and a judge is likely to sign off on it unless it’s grossly unfair to one party.
Failing to Investigate Your Spouse’s Assets
While avoiding contention in a divorce is always favorable, it’s important to avoid going too far in the other direction and trusting your spouse to be completely upfront about divulging their assets. Divorce is a painful process and even a spouse who seems uncontentious could potentially hide assets or income. Sadly, it’s human nature to want to protect your own best interests when you feel they might be threatened.
Ignoring the Tax Impacts of Your Divorce Settlement
Any divorce has impacts on each spouse’s tax filings, but especially a high-asset divorce. You could see substantial changes in your tax situation based on what assets you’ve lost and which ones you’ve kept or gained. During a high-asset divorce, it’s important to have a potential asset division agreement checked over by your accountant, tax specialist, or financial planner before you submit it to the judge.
Using an Under-Experienced Divorce Attorney
A high-asset divorce requires far more investigation and negotiation compared to an average divorce. It’s important to choose a divorce attorney with a strong financial background and experience with high-asset divorce cases. Contact our experienced lawyers today to set up a consultation.